Wisconsin Consumer Blog

As discussed in my blog post giving an overview of Wisconsin’s Lemon Law, Lemon Cars in Wisconsin: Basic overview of Wisconsin's Lemon Law, to qualify as a lemon under Wisconsin’s Lemon Law, the vehicle must have a defect or nonconformity with its manufacturer’s warranty that the manufacturer or its agent fails to fix with 4 or more attempts or the vehicle is out of service for 30 or more days all within the sooner of the first year of service or term of the warranty. Sometimes, due to when the defect arises or is first brought to the dealer for repair, a consumer does not meet the criteria for qualifying as a lemon car. There may not be enough time for 4 attempts at repair or for 30 or more days to pass just because you are at or approaching the end of the warranty period or 1-year anniversary since the date of purchase. In this case, you may not qualify for the replacement or refund remedies provided by Wisconsin’s Lemon Law, but you are not without other remedies.

Wisconsin’s Lemon Law still covers you if you reported a defect or nonconformity during the sooner of the first year or expiration of the warranty. The lemon law requires the manufacturer to fix the defect. If it does not fix it, and you have pecuniary (think money) loss, you can still bring a claim under the lemon law to recover your pecuniary loss. For example, you had to hire another service center to fix the defect and paid for it out of pocket. Or you sold the car and took a loss on the sales price because it was worth less due to the unrepaired defect. You can also recover the costs of the lawsuit, including reasonable attorney’s fees.

You likely also have rights under state and Federal warranty laws.

So you are not without a remedy. You just don’t get to claim the refund or replacement vehicle remedies.

If you have a lemon law claim like this, generally you must bring a lawsuit within 36 months of the date the car was first sold new.

If you have a car or other motor vehicle that qualifies as a lemon under Wisconsin’s Lemon Law, you have a few remedies to which you are entitled to claim against the manufacturer. The 3 available remedies are:

Request the manufacturer to provide a comparable replacement vehicle plus pay your “collateral costs.” The manufacturer can override your request for replacement with a refund of the full purchase price. The manufacturer has, in most consumer vehicle cases, 45 days to provie the replacement vehicle or refund. The manufacturer does not get any deductions for mileage or use under this remedy, regardless of whether the manufacturer provides the replacement vehicle or opts to give you a refund.

Request the manufacturer to pay a full refund of the purchase price plus sales tax, finance charges, the amount you paid at the time of sale, and “collateral costs.” The manufacturer gets to deduct from the refund amount a “reasonable amount for mileage and use. the manufacturer must provide you with the refund within 30 days of it receiving your notice of the lemon law claim and request for remedy.

For leased vehicles, request the manufacturer to pay a refund of the current value of the written lease and a refund of all amounts paid uner the lease plus sales tax and "collateral costs.” The manufacturer gets to deduct from the refund amount a “reasonable amount for mileage and use.

“Collateral costs” are the expenses you incurred in connection with the repair of a defect, including the costs of obtaining alternative transportation.

If the manufacturer fails to provide you with a remedy under the lemon law, you can bring a claim to enforce your rights in the courts. You can recover your remedy under the law plus the costs of the lawsuit, including reasonable attorney’s fees.

A consumer can bring, and must bring, a lemon law lawsuit within 36 months of the date of first delivery of the car to a consumer.

Wisconsin’s Lemon Law requires a consumer to initiate a lemon law claim for a defective car by filing a form, the MV2691, with the manufacturer. I have a sample of that form below, and the Wisconsin Department of Motor Vehicles has it available in a .doc (Word) file on its website here.

There are deadlines that you must meet. The period for determining whether the car falls within the lemon law is only the 1st year in service. However, a consumer can bring, and must bring, a lemon law lawsuit within 36 months of the date of first delivery of the car to a consumer. So you must initiate the lemon law claim with the manufacturer with sufficient time to meet this 36-months deadline to file a lemon law lawsuit with the courts in Wisconsin.

In a different blog post, I talk about what vehicles are covered by Wisconsin’s lemon law. In this post, I talk about how to start your lemon law claim with the manufacturer.

Wisconsin has a two to three step process for pursuing a lemon law claim. It starts with filing the claim with the manufacturer, possibly a non-binding arbitration, and then if your claim is still not resolved, filing a lawsuit in with the courts.

There are deadlines that you must meet. The period for determining whether the car falls within the lemon law is only the 1st year in service. However, a consumer can bring, and must bring, a lemon law lawsuit within 36 months of the date of first delivery of the car to a consumer. So you must initiate the lemon law claim with the manufacturer with sufficient time to meet this 36-months deadline to file a lemon law lawsuit with the courts in Wisconsin.

To file a Wisconsin lemon law claim with the manufacturer, you must use the Wisconsin Department of Transportation’s Motor Vehicle Lemon Law Notice and Noncomformity Report form (MV2691). In the form, you indicate whether you want the manufacturer to replace the vehicle or provide you a refund. You must fill out the form completely and send it to the manufacturer at the address indicated in your owner’s manual. To document your request, you should consider sending the form to the manufacturer by certified delivery or other method where you can show the fact of delivery and the date.

We use the term “lemon car” generally to refer to a car that has significant defects. “Lemon laws” for these cars are state based consumer protection laws that typically apply only to new car purchases or leases that are still under a manufacturer’s warranty, and in certain circumstances require the manufacturer to repair the defects, replace the vehicle, or take the vehicle back and refund the purchase price. The particular protections vary quite a bit from state-to-state as do the qualifying conditions.

Wisconsin’s lemon law is found at Wis. Stat. 218.0171. The text of the 2015-16 version is here. To apply, you must have purchased or accepted transfer of the motor vehicle in Wisconsin. The law applies to cars, trucks, motorcycles, and motor homes, among other qualifying vehicles.

The law applies to “consumers,” which includes all of the following:

A person that purchases the car new or from another while the manufacturer’s express warranty is still in effect,

a person that can enforce the warranty, and

a person that leases the vehicle from a motor vehicle lessor under a written lease.

Heavy duty vehicles may not have the same rights as the typical consumer car buyer. This post refers to the typical car and light truck consumer purchase.

A qualifying lemon car in Wisconsin is a motor vehicle that meets one of the follow two criteria during either (a) the first year from the date the new car was purchased or put in service or (b) the expiration of the manufacturer’s warranty, whichever comes first:

A motor vehicle that has a serious defect that the manufacturer or its warranty agent, like the dealer, did not fix in for or more attempts, or

A motor vehicle that has one or more defects that make it out-of-service to you for 30 days or more, which need not be consecutive days.

A note about the “out of service” criteria to qualify as a lemon. As noted, the 30-days does not have to be continuous. Time the vehicle is in the possession of the manufacturer or dealer for repair of the defects counts. In some circumstances, time in your possession will count towards the out-of-service days. Count the days in your possession when the non-conformity (or defect) (a) substantially affects your use or safety of the vehicle and (b) the manufacturer or dealer has attempted at least 2 repairs of that defect.

A qualifying “defect” or nonconformity is a condition or defect that seriously affects the use, value, or safety of the the vehicle and is covered by the warranty. So minor defects that may be irritating may not be enough to invoke the lemon law, but may still be covered under your warranty repair rights. A defect caused by abuse, neglect, or unauthorized repair is not covered.

By definition, the criteria for qualifying as a lemon must be met within the first year or, if the manufacturer’s warranty is less than 1-year, during time the warranty is in effect. So a consumer should act promptly in reporting any defect or nonconformity to the dealer or other warranty agent of the manufacturer and make the vehicle available for repair. If the attempt to repair did not work, immediately go back to the dealer and report the continuing defect and demand they make another attempt. Remember you must give the manufacturer 4 attempts to repair or that the vehicle is out of service for 30 or more days within that first year/warranty period to qualify, so waiting until the last week to report a defect may jeopardize your remedies. Keep your service records, and make sure they accurately reflect the dates, mileage, and issues reported. Keep your own log, and don’t just rely on the dealer’s records.

While the period for determining whether the car falls within the lemon law is only the 1st year in service, a consumer can bring, and must bring a lemon law lawsuit within 36 months of the date of first delivery of the car to a consumer.

To file a Wisconsin lemon law claim with the manufacturer, you must use the Wisconsin Department of Transportation’s Motor Vehicle Lemon Law Notice and Noncomformity Report form (MV2691). In the form, you indicate whether you want the manufacturer to replace the vehicle or provide you a refund. You must fill out the form completely and send it to the manufacturer at the address indicated in your owner’s manual. To document your request, you should consider sending the form to the manufacturer by certified delivery or other method where you can show the fact of delivery and the date.

With the internet, many shoppers of used cars are tempted to buy outside the state they live in. Buying outside of your state of residency can present difficulties if you have a legal issue arising out of the purchase. Two major legal issues are where you can bring the lawsuit and what state’s law will apply.

Most internet sales, generally, are not going to be sufficient to create perwsonal jurisdiction in a Wisconsin court over a non-Wisconsin resident or business. A Wisconsin court could have personal jurisdiction over the seller, though, in certain specific circumstances. For example, the seller conducts more than isolated transactions in Wisconsin, consents to jurisdiction in the purchase contract, is present in Wisconsin when committing an act that gives rise to one of the claims, purposely and knowlingly directs his unlawful conduct in Wisconsin and on a Wisconsin resident, or waives personal jurisdiction issues during the litigation.

If you buy a used car outside of Wisconsin, the law that will likely apply is the law of the state where the sale took place—typically the state where the car and seller are located. Contracts can designate a different state, and the parties’ choice of state law in a contract can but does not always control. So if you buy out of state, you will likely not be able to apply some of the important protections under Wisconsin law that may otherwise be available to you. Other states may have more or less protection, so you may want to investigate the law of hte state where you are buying to see if the protections are adequate.

Keep in mind too that pursuing a lawsuit in a distant state will likely be more expensive than in your home state. You will likely have to travel to the state where the lawsuit is pending for things like mediation, a deposition, and trial, among other things. You will also have to find a lawyer in Wisconsin that is licensed in the state where you will file the lawsuit or hire a lawyer in that other state.

Given the many protections that Wiwcsonsin law does afford a consumer buyer of used cars, you may want to buy in Wisconsin rather than a place far away. Also remember that a dealer that does not ever expecct to see you again may be less interested in working out any problems after the sale and an unscrupulous seller may see you as more vulnerable than someone that resides in his state.

On October 18, 2017, a group of Wisconsin senators introduced 2017 Senate Bill 462 to remove the $10 fee consumer reporting agencies can currently charge Wisconsin consumers to place or remove a security freeze on their consumer credit reports and to have a consumer credit report issued despite the security freeze. State representatives in the Assembly introduced a similar bill, 2017 AB 565.

Consumers can place a security freeze on their files with the consumer rerporting agencies, also known as credit reporting agencies, to prevent anyone from obtaining a consumer credit report on the consumer unless the consumer gives the consumer reporting agency specific authorization to release the report to the party making the inquiry. Its designed to lock out would-be identity thieves and prevent fraudulent accounts.

Consumer reporting agencies are profiting from this weapon against identity theft by charging a consumer a $10 fee to place and remove the security freeze and to release a report with the consumer’s authorization. This bill would remove this financial burden on consumers by prohibiting the agencies from charging the $10 fee.

At this point, the bill has only been introduced. It still must make it to the Senate floor for a vote and then to the Assembly, and finally to the governor for approval.

Wisconsin’s motor vehicle dealer regulations, Trans 139.04, have several affirmative disclosure requirements on a dealership that must be made to a buyer of a used car before the purchase contract is signed. These disclosures must be made in the Wisconsin Used Car Buyer's Guide.

Some of the important disclosures the dealership must make include:

Damage or evidence of repair to strut tower, trunk floor pan, frame or structural portion of the unibody, including corrective welds" which the dealer knew about or could find using reasonable care.

Whether or not the condition of a vehicle for sale is such that it can be legally operated at all times in accordance with ch. 347, Stats., and ch. Trans 305 of information that the dealer can find using reasonable care.

All material history and prior use or state "history and use unknown.” The disclosure of the history is not limited to those conditions which require title branding. However, the required disclosure is limited to that history which the dealer could find using reasonable care.

The regulation provides that the disclosures do not create any warranties, express or implied, nor affect warranty coverage. However, it is an unfair practice for a dealer not to remedy an item improperly reported on the guide that the dealer could have found using reasonable care if the buyer ha notified the dealer within a reasonable time after the buyer discovered or should have discovered the improperly reported item and the vehicle is made available to the dealership. Then, the dealer must remedy or make a good faith effort to reasonably remedy an item improperly reported within 30 days of the buyer's notification.

A dealership that violates these provisions of the regulations in the sale of a used car to a consumer may be subject to civil penalties. Where the buyer (consumer) has suffered a monetary (pecuniary) loss, the buyer can bring a lawsuit against the dealership for damages. A consumer’s legal remedies include recovering the costs of litigation, like attorney’s fees.

A motor vehicle dealer has an obligation to remedy an item improperly reported in the Wisconsin Used Car Buyer's Guide if:

the dealer could have found the problem using reasonable care;

the buyer notified the dealer within a reasonable time after the buyer discovered or should have discovered the improperly reported item; and

the buyer has made the vehicle available to the dealership to repair.

Trans 139.04(6)(a)(5).

Upon satisfying the 3 conditions noted above, the dealership then has the obligation to "reasonably remedy or make a good faith effort to reasonably remedy" the improperly reported item within 30 days of the buyer's notification. A dealership's failure to do so is an unfair practice that is subject to civil penalties. Where the buyer (consumer) has suffered a monetary (pecuniary) loss, the buyer can bring a lawsuit against the dealership for damages. A consumer’s legal remedies include recovering the costs of litigation, like attorney’s fees.

National Insurance Crime Bureau, for free, fraud and total loss report based on the Vehicle Identification Number (VIN). As the NICB states, its report is a “free service to the public to assist in determining if a vehicle ahs been reported as stolen, but not recovered, or has been reported as a salvage vehicle to cooperating NCIB member insurance companies."